Duke Street agrees Oasis deal

Private equity house Duke Street Capital has agreed to a recommended £76.9m takeover of Oasis Healthcare, an AIM-listed UK dentistry chain – but the deal has already been threatened by interest from rival chain Associated Dental Practices.

Oasis could end up at the centre of a bidding battle after ADP upped its stake in the target to 13.6%. ADP is the largest shareholder in Oasis after reportedly failing to buy the business for £25m in July 2006 – Oasis rejected an approach from an unnamed suitor, claiming it undervalued the company.

ADP has now said that it might make a counter-bid following Duke Street’s offer.

Duke Street’s recommended bid came after weeks of speculation surrounding Oasis. The company announced to the market in late April that it had received several approaches from parties suggesting an acquisition at a significant premium to its then share price.

It later confirmed that it had rejected one suitor that suggested a deal worth £49.4m and then £53.5m. Meanwhile, it gave the interested party with the highest proposed price access to further information to help it finalise a bid.

The proposed deal follows several transactions during the past 18 months in which investment funds have bought into UK dentistry businesses.

In November 2006, Hutton Collins made a preferred equity investment and took a minority stake in James Hull Associates, a 35-practice dentistry chain.

In April 2006, Legal and General Ventures acquired a stake in Integrated Dental Holdings, a chain with 130 practices, reportedly for more than £100m.

Oasis runs more than 130 dentistry outlets across the UK, covering both NHS and private work.